Section I: Market Analysis (Part II)

Key Recommendations and Figures

• Competitive Analysis:

• Nashville possesses unique qualities that differentiate them from competitors
• Some key weaknesses include the city’s infrastructure and city legislation
• New Market/Sector Selection and Analysis:
• Established success in the manufacturing industry, particularly the automotive manufacturing industry
• Utilizing the successes of Nissan to promote the growth in the local economy

            1.1       Competitive Analysis

For any organization, it is important to understand the industry in which one operates.  Internal strengths and weaknesses, external opportunities and threats, and industry competitors are all crucial elements that can help add clarity to a company’s current position and illustrate future blueprints for organizational success.

When considering the competitors of Nashville’s Chamber of Commerce, it’s important to observe the competitive landscape with a wide scope. There are several cities that are geographically adjacent to the city of Nashville that present distinct threats to the organization. Additionally, there are cities with larger markets and more robust budgets that pose a larger threat to Nashville’s Chamber of Commerce, regardless of its geographic location.

Those cities in close proximity include Memphis, Tennessee (Greater Memphis Area Chamber of Commerce), Louisville, Kentucky (Louisville Chamber of Commerce), Atlanta, Georgia (Metro Atlanta Chamber), and several other smaller cities such as Daleville, Alabama, Buda, Texas, and Grove City, Ohio.    

Competitors that are seemingly more threatening to Nashville’s Chamber of Commerce include Dallas Chamber of Commerce (Texas), Salt Lake Area Chamber of Commerce (Utah), Las Vegas Chamber of Commerce (Nevada), Los Angeles Area Chamber of Commerce (California), and of course the United States’ Chamber of Commerce.

After identifying Nashville’s main competitors, it is important to understand how Nashville’s Chamber of Commerce, and the city it represents, portrays itself relative to its competitors. The most unquestioned strength that the city and its culture possess is its global reputation in the entertainment industry, specifically music.  The country music genre is arguably synonymous with the city of Nashville itself.  This international presence helps bolster the region’s vibrancy, artistic, and musical essence. This is a quality that makes the city undeniably unique, and a competitive advantage that they hold over most competitors. 

Another strength to consider is the educated workforce residing in-and-around the city of Nashville.  With cutting-edge universities in the area, such as Vanderbilt University, Belmont University, and Lipscomb University, the city of Nashville has benefited from its youthful and highly educated population. While other major cities have similar strengths, Nashville undoubtedly possesses a competitive advantage over some of the aforementioned local cities.  This strength helps bolster other strengths, such as a diverse and growing economy, creative culture, and technological innovation.

Some of the weaknesses that Nashville’s Chamber of Commerce must acknowledge include the city’s infrastructure, particularly its transportation layout. This could be essential to the organization’s hoping to maximize logistical processes. Furthermore, the Nashville market and population can be considered a weakness when compared to other cities they could be competing against.  Previously mentioned cities, such as Los Angeles and Dallas, have better market statistics if a respective company chooses to value those performance indicators. And finally, city and state legislation could be viewed as a potential weakness. While other competing cities may have to deal with similar issues, it is certainly something that could hinder the Nashville Chamber of Commerce and something they should consider from a self-evaluation perspective.

1.2       New Market/Sector Selection and Analysis

Based on our analysis of the client and competition, the most promising new market for Nashville Area Chamber of Commerce to focus its efforts on attracting new business activity is within the manufacturing industry.

In regards to foreign business, Nashville is an attractive market because of its location, low costs, and supportive business policy. The city of Nashville possesses a diverse population and puts the city in a great position to increase the growth in the manufacturing industry, which is rapidly expanding business throughout the southeastern region in the United States. Looking at growth over the past four years in manufacturing throughout the United States alone, the automobile industry has provided 25-35% more jobs in 2015 than it did in 2011, as it continuously grows. As more jobs are being created, especially in the region of the United States in which Nashville, Tennessee is located, it makes sense that a foreign investor would seek to invest in the continuing expansion of business in an industry that is already proved to be successful.

As previously stated, with manufacturing within the automobile industry growing at the rate it is, countries such and India, China, and Japan, which have made strong advances to boost their own profits and economy, would be ideal fits for the Nashville Chamber of Commerce to pursue foreign direct investment with. With Nashville’s strong ties to the industry, combined with India, China, and Japan’s interests in advanced manufacturing, both sides would be able to benefit from the move.

With manufacturing in the automobile industry expanding as rapidly as it is, and with the strong presence of Nissan and its now rooted business within the Nashville community, creating a joint venture between a targeted FDI and Nissan to build a more profitable car manufacturing plant would not only boost profits, but open up more job opportunities, which would make Nashville an even more attractive place for people to reside. Nissan is a Japanese owned automobile manufacturer and Japan is currently Nashville’s largest foreign investor.  This, in turn, not only brings in more international business but is a contributing factor to growing the local economy.

Another factor that foreign investors would see as an advantage in using Nashville as a location for business investment is the pool in which they would be recruiting locally from for qualified job applicants. With a strong base of local universities and colleges, such as Belmont University, Lipscomb University, and Vanderbilt University, not only would foreign direct investors be able to guarantee that local citizens would be able to fill jobs quickly, they could also build a partnership with the local collegiate institutions that provide a direct line of access to college students interested in the field of manufacturing, with the proper education and exposure to their specific business. This would serve well with the idea that business can establish contact and rapport with students studying and training to potentially go directly into the manufacturing industry following their completion of college.

For the sources of foreign direct investment that the Nashville region should focus is China. Based on the research of OECD, China is the third-largest foreign direct investor in the world. The figure above clearly shows that Chinese investors continue to increase the number of investments made overseas at the high rate of growth. Therefore, China has become one of the most attractive markets for the Nashville Area Chamber of Commerce. Why would we choose the automotive industry as a developing industry for the city of Nashville?

According to data released by Jato Dynamics, global car sales are up by 5.6% in 2016 due to soaring production and demand in China, India, and Europe. The picture shows many countries increase in demand, such as EMEA (EU, Russia, Turkey, South Africa, and Israel), North America, China, South East Asia-Oceania and India. Despite some country’s decreasing demand, such as Japan, Korea, and South America, the demand for automobiles is still generally high in the world.  Therefore, the best opportunity for Nashville to expand their business is to further utilize their manufacturing capabilities, especially in the automobile industry. Why should we choose Nissan as our partner?

With Nissan already having an established manufacturing plant in Smyrna, Tennessee (not far from Nashville), it would make sense for investors to seek opportunities in expanding business by joining forces with Nissan. Because of the high demand automobiles possess worldwide, and because Nissan, one of the world’s largest automobile companies, the company relies heavily on their manufacturing plant in Smyrna to produce efficiently and effectively in order to get their products out on the market, to sell and ultimately earn profit, the industry requires an advanced method of production in order to keep up with the highly growing demand in automobiles the world possesses. An investor who would be interested in growing the companies already grounded manufacturing, in order to produce and sell more automobiles to a guaranteed market would be able to accumulate financial profit and success quickly, while also providing Nissan with the financial backing to growing and becoming a more dominant player in their field. With both sides getting financial benefits, as well as a growing reputation for putting reliable, safe cars on the roads all around the world, it’s no secret that making investments in the Nashville area would accumulate financial and economic expansion, sooner than most people would realize.